Discussion: The phaseout of electric vehicle subsidies in Germany

Elena Pro

European Institute, London School of Economics

The Puzzle

The consequence of the phaseout of electric vehicle subsidies in Germany on the competitiveness of the German automotive industry.


Zooming out:

  • What is the relationship between competitiveness and decarbonisation?
  • What are the factors/actors dictating this relationship? And, who is affected by this trade-off?

The Case

You plan to use the exogenous shock of the phaseout of electric vehicle subsidies in Germany to study the impact of removing a decarbonisation policy on:

  • Consumer behaviour (sales)
  • Firms’ behaviour (cars production and investment)
  • Firms’ market power (market shares)

General Comments

Strengths:

  • Timely and relevant –> topic and research design
  • Data-driven: as you show in your figures there’s clearly something going on.
  • Clear exogenous variation: allows you to identify potential effects.


Weaknesses:

  • Less clear theory or mechanism.

  • Almost too data driven: I am sure there is something going on but HOW and WHY is it happening?

Theory and Definitions

  • Define your key terms:
    • What do you mean by competitiveness?
    • What do you mean by decarbonisation?
  • Are these two mutually exclusive or complementary?
  • What is your theoretical expectation about their interaction?
    • from one of the simulations it seems that competition, in a specific setting and under certain assumptions, could positively affect decarbonisation, but you seem to suggest the opposite.

Causal Questions

  • What is the causal mechanism?
  • Which one is X and which one is Y?
  • Define a clear causal question
  • Without it, it’s hard to choose an appropriate research design.

flowchart LR
  A[Decarbonisation?] --> B(Competitiveness?)
  B --> A

Design

  • The research designs are all credible and feasible
  • Hard to pick a design if you don’t have a clear question
  • For sure this shock has an effect on something, but:
    • which something do you care about and why?
    • what does this effect mean?
    • what is the mechanism behind it?

Linking to Empirics

  • Tell a story with your data.
    • Why are you showing these figures? Use them to tell us your story
  • Tell us your story. What do you think is going on?

Relevance and Framing

  • Why does this matter?
  • What can we learn from this case (Germany/subsidies) that can help us understand decarbonisation and competitiveness at large
  • Leaving behind a crucial actor: institutions
    • How do they shape the relationship between decarbonisation and competitiveness?
    • They ultimately dictate the rules of the game and the priorities
      • –> compatitiveness >> decarbonisation?

flowchart LR
  A{Institutions *Policy*} --> B(Firm Behaviour *Production and Investment*)
  A --> C(Consumer Behaviour *Sales*)

Thank you!